There's a good chance that you're addicted to using Facebook (NASDAQ:FB) on your phone. In fact, 61% of 7,446 polled iOS and Android users said they use their Facebook mobile application every day, according to a study published last week by IDC and Facebook. The majority of participants in the study say that they check their News Feed constantly. But the phenomenon isn't affecting Facebook in isolation -- LinkedIn (NYSE:LNKD.DL) and Twitter are beneficiaries as well. What does this mean for investors in the social space? Spoiler alert: It's good news.
The Facebook phenomenon
The increasing amount of social engagement taking place on connected devices is due to two major factors, says IDC:
- A universal need to feel connected with others.
- The widespread adoption of smartphones.
Facebook, LinkedIn, and Twitter have created platforms for people to engage, share, and connect on these pocket-sized computers. The result? "Social engagement via phones has become mainstream," concludes the report.
Smartphones are very important and critical tools "for connecting with friends, family, and colleagues every day," the IDC study revealed. Most respondents polled keep their smartphone with them all but two hours a day, on average. One out of every four smartphone owners can't even recall when the last time was that their smartphone was not close to them.
As smartphones are being adopted in droves, platforms that are effectively connecting people on mobile devices are benefiting. IDC notes that it expects smartphone users in the U.S. to grow from 155 million in 2012 to 181 million and 222 million in 2013 and 2014, respectively.
Which companies will benefit?
Facebook will undoubtedly see favorable effects from the growing use of smartphones and tablets. It overwhelmingly receives the most attention from smartphone users, with an average number of daily sessions on Facebook of 13.8 and an average session length of 2:22 minutes. But LinkedIn should benefit, too.
LinkedIn received little attention in the study, and rightly so -- its main purpose is to enhance people's professional network; this is something we just don't devote daily attention to. But it still managed to notch some impressive stats:
- 4% of smartphone owners use LinkedIn when they are at a live event.
- 2% while they are at a meeting or class.
- 2% when they go out to eat or get drinks.
These stats are impressive when you consider the fact that LinkedIn has only 202 million members, compared to Facebook's 1.06 billion monthly active users.
Mobile and social go hand-in-hand
There's a host of reasons for the astounding growth of social platforms like Facebook, LinkedIn, and Twitter. But the link between mass adoption of smartphones and a global need for connectivity undoubtedly remains a major driving force. With worldwide smartphone adoption still growing by leaps and bounds, Facebook and LinkedIn should continue to benefit.
Facebook and LinkedIn may be expensive stocks, but worldwide smartphone and tablet adoption could help them grow into market expectations. So don't rule these investments out simply because of their valuations.